So the Dollar...

[Stunt]

I don't see this as a sign for the collapse of the EU.
The OP is speculating beyond logical comprehension; It's just as bad as saying the US will never succeed in Iraq because there was a few more bombing and the insurgency exists. A small speed bump, but I concur that it's not a good thing.

Europe's currency was rising because investers were pulling out of the US (ie. Buffet and many others). It is an alternative to the dollar and will be for years to come as Americans and others demand a different currency, even Iran is now trading oil in Euros. The price of the Euro went up due to demand, for the most part, by Americans. In times of war, massive trade and budget deficit, and policial uncertainty, people wanted a more stable environment, and Europe was the answer (Similar effect with the Canadian Dollar). This is the only reason for the higher Euro, it's not the fault of Europeans or the EU, but the rest of the world.

 

[MisterCornell]

You people know nothing about currency markets.

 

[Stunt]

Originally posted by: MisterCornell
You people know nothing about currency markets.

Have any actual input? With your vast knowledge (you must, if you are able to make a statement like that) you can enlighten us all with our misperceptions.

 

[1EZduzit]

I think a European Commonwealth is about as likely to happen as a Farmers Union. All the farmers get together and say they're going to cut back on planting acres, but then they go back to their farm and plant everything they can.

Their attitude is to let the other guys cut back and raise the prices so they can cash in. It's not the best analogy, but I think the basic premise applies here.

 

[ntdz]

Originally posted by: BarneyFife
The Euro has ruined Europe. Inflation in countries such as Italy and Greece has caused hardship. We are talking about 200% increases in a lot of things. I hope the Euro goes down in flames because it was nothing more than the wealthy elites of Europe trying to compete with the US dollar.

I agree. You are SPOT ON about Italy and Greece. I was in Italy last year, and the tour guide was explaining all the problems the country was having, it was sad for such a wealthy nation.

 

[Infohawk]

Originally posted by: ntdz
I agree. You are SPOT ON about Italy and Greece. I was in Italy last year, and the tour guide was explaining all the problems the country was having, it was sad for such a wealthy nation.

Italy and Greece (especially Greece) were never considered particularly wealthy nations compared to the rest of Europe. Sounds like your tour-guide anecdote is just that. I wouldn't base too much on that.

 

[ntdz]

Originally posted by: Infohawk

Originally posted by: ntdz
I agree. You are SPOT ON about Italy and Greece. I was in Italy last year, and the tour guide was explaining all the problems the country was having, it was sad for such a wealthy nation.

Italy and Greece (especially Greece) were never considered particularly wealthy nations compared to the rest of Europe. Sounds like your tour-guide anecdote is just that. I wouldn't base too much on that.

The tour guide never said they were wealthy, I consider them wealthy, being they are first world.

 

[Infohawk]

Originally posted by: ntdz
The tour guide never said they were wealthy, I consider them wealthy, being they are first world.

My point wasn't that the tour guide was saying they were wealthy. But that you shouldn't overstate the importance of his comments.

 

[ntdz]

Originally posted by: Infohawk

Originally posted by: ntdz
The tour guide never said they were wealthy, I consider them wealthy, being they are first world.

My point wasn't that the tour guide was saying they were wealthy. But that you shouldn't overstate the importance of his comments.

Why? You seem to be able to point out all the problems of the USA just fine...should i decrease the importance of your comments too?

 

[sandorski]

Originally posted by: Genx87

Originally posted by: sandorski
They're not screwed, just wondering what's next after the French and Dutch Constitutional rejection. Don't gloat yet, US economic policy isn't working and in the coming weeks Dollar/Euro values will settle out as before.

Our GDP growth is about double the EU's.

It must be doing something right.

The US GDP Growth would be much higher if the US Government wasn't sucking so much money out of it with Deficits. The Trade Deficit also deflates Growth and the 2 Deficits together are increasingly alarming Investors. If the US doesn't turn around those Deficits the sh1t is going to hit the fan eventually and depending how hard it hits you could end up envying Europe's Growth(assuming they still have it). There is a growing number of Investors/Analysts predicting a US Recession in 2006, so like I said, don't Gloat yet.

 

[Infohawk]

Originally posted by: ntdz

Originally posted by: Infohawk

Originally posted by: ntdz
The tour guide never said they were wealthy, I consider them wealthy, being they are first world.

My point wasn't that the tour guide was saying they were wealthy. But that you shouldn't overstate the importance of his comments.

Why? You seem to be able to point out all the problems of the USA just fine...should i decrease the importance of your comments too?

You shouldn' judge my comments based on the fact I am saying them, but based on the arguments. You didn't share any of tour guide's arguments. You just presented him as some authority.

 

[Stunt]

Originally posted by: Infohawk
You shouldn't judge my comments based on the fact I am saying them...

:laugh:

 

[CanOWorms]

Here's an article talking about the Euro after the results of the No votes.

Doom scenarios over euro's future
3 June 2005

AMSTERDAM ? Doom scenarios about the future of the euro are being heard in France and the Netherlands after both nations rejected the EU Constitution in recent referendums.

The president of the Dutch reserve bank DNB, Nout Wellink, has dismissed the speculation as "nonsense", while German Finance Minister Hans Eichel claims such talk is "irresponsible".

But the word is out: after two 'no' votes and a persistent economic malaise, doom and gloom scenarios are being heard about the future of the euro, Dutch newspaper 'De Volkskrant' reported on Friday.

"It is no longer unthinkable that the euro will bust," Leuven University international economics professor Paul de Grauwe said.

Underpinning his assertions, a professor with the European University in Florence, Rick van der Ploeg, said the present political reality could lead to the end of the euro.

Opponents to the euro, including Amsterdam University economics professor Sweder van Wijnbergen, warned in the 1990s Europe could not have a single currency because the economies of the various countries were so different. A single currency would also require a political union, he said.

Supporters of the currency said a political union would arise naturally due to the introduction of a joint currency.

However, De Grauwe said political integration appears to be dead after the no votes in the Netherlands and France, despite the fact "a political union is necessary for a healthy euro".

Van Wijnbergen says the growth rates of European economies are still widely different and it is no longer possible for individual nations to maintain different monetary policy or exchange rates to buffer economic imbalances.

If EU workers relocated to regions with good economic growth, economic differences would level out. But labour mobility does not and will never exist, Van Wijnbergen claimed.

However, he rejected the overnight dismantling of the euro due to the high costs involved and Van der Ploeg said the joint currency can still be rescued. This would depend on France and Germany reforming their labour markets, he said.

 

[Engineer]

I'm not so sure, after learning a little, that a weaker dollar isn't good for American exports and helping curve imports. Of course, for it to be effective, China would need to break away from the US dollar, something that they have been fighting against and pouring money like hell into the US system to keep it that way.

 

[MadRat]

Everytime I read threads like this I get this question running across my mind: "Could it be that the commoners of the EU have a better grasp on the economy then the policy makers?"

Then I remember that the policy makers of the EU are the economy.

 

[Infohawk]

What is so great about every little country having its own currency?

 

[Stunt]

Domestic control over monetary policies, created and implemented by your citizens for your citizens?

 

[Infohawk]

Originally posted by: Stunt
Domestic control over monetary policies, created and implemented by your citizens for your citizens?

Meh. The same argument could be used to have 50 currencies in the US. The individual nations still have control over their policy, they just have to share it with other nations, just like US states have to share policy with other states.

 

[Stunt]

That's the thing. One country could be doing poorly and the rest of Europe well, and the poorer country will be affected with the higher currency value. There is no real benifit of having more currencies, just that your currency's performance is not affected by the rest of Europe.

 

[Genx87]

Originally posted by: sandorski

Originally posted by: Genx87

Originally posted by: sandorski
They're not screwed, just wondering what's next after the French and Dutch Constitutional rejection. Don't gloat yet, US economic policy isn't working and in the coming weeks Dollar/Euro values will settle out as before.

Our GDP growth is about double the EU's.

It must be doing something right.

The US GDP Growth would be much higher if the US Government wasn't sucking so much money out of it with Deficits. The Trade Deficit also deflates Growth and the 2 Deficits together are increasingly alarming Investors. If the US doesn't turn around those Deficits the sh1t is going to hit the fan eventually and depending how hard it hits you could end up envying Europe's Growth(assuming they still have it). There is a growing number of Investors/Analysts predicting a US Recession in 2006, so like I said, don't Gloat yet.

I doubt it, the EU is forcasting sub 2% growth for the forseeable future. The US is growing at 3.5% through the 1st qtr. We grew 4.4% last year and even in a recession in 02 we grew at a faster pace in war than the EU does in relative peace.

The deficits are 1% point different as a % of gdp. The United States is 3.7% while the EU is 2.7% and the EU carrys a higher debt to gdp ratio than the United States.

Lets not get started on unemployment.

btw when we hit a recession the EU will follow suit just like they did the last time we had a recession in 01-02.

 

[imported_Tango]

Originally posted by: Infohawk

Originally posted by: ntdz
I agree. You are SPOT ON about Italy and Greece. I was in Italy last year, and the tour guide was explaining all the problems the country was having, it was sad for such a wealthy nation.

Italy and Greece (especially Greece) were never considered particularly wealthy nations compared to the rest of Europe. Sounds like your tour-guide anecdote is just that. I wouldn't base too much on that.

Hum... actually Italy is in the G8....

 

[imported_Tango]

Originally posted by: Genx87

Originally posted by: sandorski

Originally posted by: Genx87

Originally posted by: sandorski
They're not screwed, just wondering what's next after the French and Dutch Constitutional rejection. Don't gloat yet, US economic policy isn't working and in the coming weeks Dollar/Euro values will settle out as before.

Our GDP growth is about double the EU's.

It must be doing something right.

The US GDP Growth would be much higher if the US Government wasn't sucking so much money out of it with Deficits. The Trade Deficit also deflates Growth and the 2 Deficits together are increasingly alarming Investors. If the US doesn't turn around those Deficits the sh1t is going to hit the fan eventually and depending how hard it hits you could end up envying Europe's Growth(assuming they still have it). There is a growing number of Investors/Analysts predicting a US Recession in 2006, so like I said, don't Gloat yet.

I doubt it, the EU is forcasting sub 2% growth for the forseeable future. The US is growing at 3.5% through the 1st qtr. We grew 4.4% last year and even in a recession in 02 we grew at a faster pace in war than the EU does in relative peace.

The deficits are 1% point different as a % of gdp. The United States is 3.7% while the EU is 2.7% and the EU carrys a higher debt to gdp ratio than the United States.

Lets not get started on unemployment.

btw when we hit a recession the EU will follow suit just like they did the last time we had a recession in 01-02.

As already said many many times... EU and the USA have a totally different culture and economic philosophy. The EU doesn't want an high GDP percentual increase, because it isn't ready for the politics that this would require. The EU economic pact is called "stability pact", and it requires stability above everything else. Add the social system, free education, healthcare, funds given for culture and the arts and you will understand the european priorities.

They are two different systems, not comparable. And an high GDP increase is not necessary for a overperforming currency... just look at the Swiss Franks....

The euro/dollar exchange rate should be 1 to 1, and eventually it will be so. My personal opinion is that the dollar will surge in the next 12 months, then decline again in 2007, then gradually rise again untill parity. Nobody knows anything for sure, of course, as the variables are too many and unpredictable.

 

[irwincur]

btw when we hit a recession the EU will follow suit just like they did the last time we had a recession in 01-02.

Hell, the EU region has not even recovered from the recession in the early 1990's. Another one over here may really set them back. There has only been a single year of greater than 3% growth in the EU region GDP over the past 15 years. Average growth is much lower than that.

Europe is functionally the largest stagnant economy in the world. Even more sad however, is that no one has a solution the the problem that will make anyone happy. The real world solution is to dissolve the welfare state - it is literally sucking Europe dry. I doubt any of the now welfare and government dependant Europeans will be overly excited with the prospects of this.

But, if they want to save Europe, prevent the bankruptcy of France and Germany, and quite likely prevent yet another major conflict, they will have to accept this.

 

[Genx87]

Originally posted by: Tango

Originally posted by: Genx87

Originally posted by: sandorski

Originally posted by: Genx87

Originally posted by: sandorski
They're not screwed, just wondering what's next after the French and Dutch Constitutional rejection. Don't gloat yet, US economic policy isn't working and in the coming weeks Dollar/Euro values will settle out as before.

Our GDP growth is about double the EU's.

It must be doing something right.

The US GDP Growth would be much higher if the US Government wasn't sucking so much money out of it with Deficits. The Trade Deficit also deflates Growth and the 2 Deficits together are increasingly alarming Investors. If the US doesn't turn around those Deficits the sh1t is going to hit the fan eventually and depending how hard it hits you could end up envying Europe's Growth(assuming they still have it). There is a growing number of Investors/Analysts predicting a US Recession in 2006, so like I said, don't Gloat yet.

I doubt it, the EU is forcasting sub 2% growth for the forseeable future. The US is growing at 3.5% through the 1st qtr. We grew 4.4% last year and even in a recession in 02 we grew at a faster pace in war than the EU does in relative peace.

The deficits are 1% point different as a % of gdp. The United States is 3.7% while the EU is 2.7% and the EU carrys a higher debt to gdp ratio than the United States.

Lets not get started on unemployment.

btw when we hit a recession the EU will follow suit just like they did the last time we had a recession in 01-02.

As already said many many times... EU and the USA have a totally different culture and economic philosophy. The EU doesn't want an high GDP percentual increase, because it isn't ready for the politics that this would require. The EU economic pact is called "stability pact", and it requires stability above everything else. Add the social system, free education, healthcare, funds given for culture and the arts and you will understand the european priorities.

They are two different systems, not comparable. And an high GDP increase is not necessary for a overperforming currency... just look at the Swiss Franks....

The euro/dollar exchange rate should be 1 to 1, and eventually it will be so. My personal opinion is that the dollar will surge in the next 12 months, then decline again in 2007, then gradually rise again untill parity. Nobody knows anything for sure, of course, as the variables are too many and unpredictable.

Well if they dont want high gdp growth that is what they will get. They will also fall further off the face of the earth as a result until their gdp is so small compared to the rest of the worlds they are insigificant.

If this is too plan that is a terrible plan imo.

 

[Stunt]

The US does have a higher growth rate than Europe, nobody can deny this. On the long term, the growth rates are very similar, almost not worth considering, as the reason for the additional productivity is due to the US's much larger population growth.

It is not all that hard to understand if the population grows faster, the ability to generate more money from those people is easier. The unfortunate downfall of this is government spending must go up to pay for the additional services the government has been known to provide to its citizens.

Here's the population data

European Union 0.16%
United States 0.92%

Where the most economically developed countries in the EU have some of the lowest groth rates in the world.

Italy 0.07%
Spain 0.15%
United Kingdom 0.28%
Germany 0%
France 0.37%

IMO this easily accounts for the 1% of GDP some American patriots are touting around here.